McDonald's sales way below target

Thu, Aug 9, 2012, 01:00

McDonald’s reported flat sales in July at established restaurants around the world, its worst performance in more than nine years and a signal that a weakening global economy is taking a bite out of mainstream diners’ discretionary spending.

The results came in far below Wall Street’s expectation and marked the first time since April 2003 that sales at restaurants open at least 13 months did not rise. Shares of the world’s biggest hamburger chain were down 1.6 per cent at $87.56 in midday trading. The stock has fallen more than 14 per cent from its peak of $102.22 in January.

Just two weeks ago, McDonald’s said it had expected worldwide July sales at restaurants open at least 13 months to rise, but not as much as the 3.7 per cent gain reported in the second quarter.

After months of outpacing rivals, it appeared that McDonald’s ceded market share in July.

Burger King Worldwide is among the fast-food chains that have stepped up their game with new food and promotions. It has been blitzing diners with ads starring the likes of soccer star David Beckham and actor Salma Hayek. – (Reuters)